Kingsway Flat on Buying Pipe Cleaning Company
Kingsway Financial Services Inc. (NYSE:KFS) shares began Tuesday’s trading day slightly above the breakeven point. The Chicago-based Kingsway, claiming to be the only publicly-traded U.S. company employing the Search Fund model to acquire and build great businesses, today announced the acquisition of AAA Flexible Pipe Cleaning Corp, a leading commercial and residential plumbing services business located in Cleveland. Advanced Plumbing and Drain is the second business operated under the Kingsway Skilled Trades platform.
Advanced Plumbing and Drain is one of the top commercial plumbing services companies in the Cleveland, Ohio metropolitan service area. Founded in 1926 by Benjamin Fisco, Advanced Plumbing and Drain has been owned and operated by the Fisco family for nearly a century and has developed a well-earned reputation for quality, integrity, professionalism, and service.
Advanced Plumbing and Drain's customer base is split 65% commercial and 35% residential, and approximately 90% of revenues are either recurring or reoccurring. Kingsway believes Advanced Plumbing and Drain has significant opportunity for both revenue and profit growth, and Kingsway intends to accelerate investment in people, service lines, and marketing.
The transaction closed last Friday. The purchase price included $3.0 million cash at close, a $0.5-million seller note due in 2030, and a potential earn-out of up to $1.5 million based on growth in adjusted EBITDA that is payable in 2027 and 2028. Kingsway is also responsible for certain closing fees and expenses.
KFS shares eked out a gain of seven to $13.92
